What a concept! The fossil fuel industry pay for loss and damage?

The COP is an exciting experience, rich with smart, creative and passionate individuals. Among them is a still relatively small network of thought leaders – researchers, attorneys, and others – advocating a new direction for mitigating GHGs and advancing accountability for atmospheric carbon contributions. In a side event yesterday panelists from the Climate Accountability Institute (CAI), Union of Concerned Scientists (UCS), The Center for International Environmental Law (CIEL) and the Climate Justice Programme explored multiple dimensions of climate responsibility and ways to change fossil fuel industry behavior using research from the Carbon Majors Project of the CAI. A particularly intriguing concept offered was a fossil fuel extraction levy to help pay for loss and damage from climate change.

Focusing on the largest emitters in the world, the Carbon Majors Project research has revealed that, as of 2013, as few as 90 entities were actually responsible for 65% of the now 1.4 trillion tons of cumulative CO2 in our atmosphere. These fossil fuel extractors, refiners and sellers include investor-owned companies, state-owned companies, and national government-run industries. The power of this research is that it comes from companies’ own production statements themselves, and it accounts for mergers and acquisitions over time.

The Carbon Majors Project’s primary objective is “to quantify and trace historical and cumulative emissions of carbon dioxide and methane to the largest extant fossil fuel and cement producers.” Instead of the primarily fuel consumption-based and aggregated approach used to estimate national GHG inventories of the 6 GHGs covered by the Kyoto Protocol, this work traces emission back to those corporate producers responsible for the majority of our fossil fuels and cement. Carbon Majors’ top-20 list includes some you’d expect: Chevron, ExxonMobil, and BP – all investor-owned companies.

The trajectory of the research is to link from emissions to concentrations to temperature increase to impacts and ultimately to damages. As UCS’s Peter Frumhoff put it, this work will increasingly “inform the policy, legal and social discussion about responsibility.”

The ethical dimension raised by yesterday’s panel centered on a couple of questions:

What might we have expected these companies to do in the face of the scientific data and information available as far back as 1988, when the IPCC was formed?

What level of responsibility do they have for committing us to a dangerously warming world?

According to work by the Union of Concerned Scientists, instead of taking the long view and beginning to shift to renewable fuel production, the fossil fuel industry “actively invested in sowing doubt, and solidifying its business model by intensifying exploration and extraction.”

On the legal dimension, Niranjali Amerasinghe of the Center for International Environmental Law shared the significant potential for this research to inform legal strategies. Establishing the causal chain creates opportunities for a number of legal theories, including: torts (going after past harm), nuisance, negligence (at what point was this known?), misinformation/deception, and even product liability (are these emissions inherently dangerous things?). Granted, there are huge jurisdictional challenges to putting these legal theories into practice. Nonetheless, the Carbon Majors research offers a powerful tool for holding these companies accountable. And there are side benefits to a legal angle, for instance the increase in financial risk of an asset that could become “stranded.”

Putting these pieces together, the Climate Justice Programme builds on the work of the Carbon Majors Project and CIEL in formulating the “bad faith” argument based on the violation of the principle of “no harm.” Its solution: The fossil fuel industry should pay for the damages their products have created and are creating through a levy to Warsaw International Mechanism for Loss and Damage (WIM).

With climate finance still currently woefully inadequate for adaptation alone, much less for means of implementation, a new source of finance is critical for ensuring that the poor and vulnerable impacted populations are not the ones who pay for the climate change loss and damage they suffer. The idea is that through the WIM, such funds could go directly to affected communities or to pay insurance costs.

Resting on key precedents such as the Oil Spill Compensation Fund (a regime to provide funding for oil spills), this levy could be based on the historical emissions of the Carbon Majors and the future extraction of fossil fuels. Taking this route could be attractive to governments and increase risk assessment capacities of companies.

Yes, the panelists and the audience acknowledged many questions and challenges, but the energy in the room was palpable. These weary champions seemed genuinely excited that they might just have something here that’s been needed for decades.